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In the last reported quarter, its adjusted earnings per share (EPS) met the Zacks Consensus Estimate and decreased 71.3% year over year. Total revenues beat the Zacks Consensus Estimate by 2%, but declined 27% year over year.
KBH’s earnings topped the consensus mark in two of the last four quarters and met on the remaining two occasions, with an average surprise of 3.7%.
How Are KBH’s Estimates Placed?
For the fiscal third quarter, the Zacks Consensus Estimate for adjusted EPS has remained unchanged at 88 cents over the past 30 days. The projected figure indicates a 45.3% decline from the year-ago quarter’s earnings of $1.61 per share.
The consensus estimate for total revenues is pegged at $1.29 billion, indicating a decline of 20.2% from the prior-year quarter’s level.
Factors Likely to Have Shaped KB Home’s Q3 Performance
Revenues
KB Home’s fiscal third-quarter top line is likely to have declined year over year, reflecting lower home deliveries and average selling price (“ASP”) of deliveries. Affordability concerns, elevated mortgage rates, cautious consumer sentiment and recent geopolitical uncertainty are likely to have continued weighing on housing demand. At the same time, the company’s return to a predominantly built-to-order model, higher community count and shorter build times are likely to have supported delivery activity during the quarter.
Due to the ongoing market pressures, the company expects housing revenues in the fiscal third quarter to range within $1.2-$1.35 billion, down from $1.61 billion reported a year ago. KBH expects home deliveries between 2,600 and 2,800 during the quarter, indicating a decline from 3,393 units delivered in the year-ago quarter.
Our Zacks model predicts ASP on home deliveries to be down 1.3% to $469,700. We expect home deliveries to be down 19.4% year over year to 2,736 homes.
Margins
KB Home’s fiscal third-quarter margins are likely to have remained under pressure from pricing pressure, higher relative land costs and lower operating leverage. Material cost pressures, particularly from lumber, are also likely to have weighed on profitability. However, the higher mix of built-to-order deliveries and better operating leverage are expected to have provided some support to margins during the quarter.
KB Home expects adjusted housing gross margin in the range of 16-16.6%, significantly down from 18.9% reported in the year-ago quarter. Our model projects adjusted housing gross margin and homebuilding adjusted operating margin to be 16.3% and 4.9%, respectively, indicating year-over-year declines of 260 basis points (bps) and 390 bps.
KBH expects selling, general & administrative expenses, as a percentage of housing revenues, to be between 11.3% and 11.9%, compared with 10.7% in the year-ago quarter. The company expects the SG&A ratio to improve sequentially in the second half of the year, mainly due to increased volume and higher revenues. Our model expects the metric to increase 130 bps year over year to 11.3% in the fiscal third quarter, while declining 140 bps sequentially.
Orders & Backlog
Order activity in the fiscal third quarter is likely to have reflected cautious buyer behavior amid affordability pressures and mortgage rate uncertainty. Still, KB Home reported a steady order pace entering the quarter, while the built-to-order mix has been rising as a percentage of orders. The company also expected backlog to grow sequentially and return to year-over-year growth in the fiscal third quarter.
Keeping these factors in mind, we expect new orders to decrease 3.6% to 2,843 units on a year-over-year basis. However, the backlog is expected to be 4,633 units, implying 6.9% growth from 4,333 units reported in the prior year.
What Our Model Indicates for KBH
Our proven model does not predict an earnings beat for KB Home this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case this time around.
KBH’s Earnings ESP: The company has an Earnings ESP of -5.32%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
KBH’s Zacks Rank: The stock currently has a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
The company’s earnings beat estimates in each of the last four quarters, the average surprise being 34.6%. Comfort Systems’ earnings for the third quarter of 2026 are expected to grow 50.6%.
Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +10.45% and a Zacks Rank of 3 at present.
The company's earnings beat estimates in three of the last four quarters and missed on the remaining occasion, with the average surprise being 11.4%. Primoris’ earnings for the third quarter of 2026 are expected to decline 61.7%.
Quanta Services, Inc. (PWR - Free Report) currently has an Earnings ESP of +3.45% and a Zacks Rank of 1.
The company’s earnings have topped in each of the trailing four quarters, the average surprise being 17%. Quanta’s earnings for the third quarter of 2026 are expected to grow 47.2%.
View the Zacks #1 Rank List
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KB Home to Report Q3 Earnings: Here's What Investors Must Know
Key Takeaways
KB Home (KBH - Free Report) is slated to report its third-quarter fiscal 2026 (ended Aug. 31) results on Sept. 22, after market close.
In the last reported quarter, its adjusted earnings per share (EPS) met the Zacks Consensus Estimate and decreased 71.3% year over year. Total revenues beat the Zacks Consensus Estimate by 2%, but declined 27% year over year.
KBH’s earnings topped the consensus mark in two of the last four quarters and met on the remaining two occasions, with an average surprise of 3.7%.
How Are KBH’s Estimates Placed?
For the fiscal third quarter, the Zacks Consensus Estimate for adjusted EPS has remained unchanged at 88 cents over the past 30 days. The projected figure indicates a 45.3% decline from the year-ago quarter’s earnings of $1.61 per share.
KB Home Price and EPS Surprise
KB Home price-eps-surprise | KB Home Quote
The consensus estimate for total revenues is pegged at $1.29 billion, indicating a decline of 20.2% from the prior-year quarter’s level.
Factors Likely to Have Shaped KB Home’s Q3 Performance
Revenues
KB Home’s fiscal third-quarter top line is likely to have declined year over year, reflecting lower home deliveries and average selling price (“ASP”) of deliveries. Affordability concerns, elevated mortgage rates, cautious consumer sentiment and recent geopolitical uncertainty are likely to have continued weighing on housing demand. At the same time, the company’s return to a predominantly built-to-order model, higher community count and shorter build times are likely to have supported delivery activity during the quarter.
Due to the ongoing market pressures, the company expects housing revenues in the fiscal third quarter to range within $1.2-$1.35 billion, down from $1.61 billion reported a year ago. KBH expects home deliveries between 2,600 and 2,800 during the quarter, indicating a decline from 3,393 units delivered in the year-ago quarter.
Our Zacks model predicts ASP on home deliveries to be down 1.3% to $469,700. We expect home deliveries to be down 19.4% year over year to 2,736 homes.
Margins
KB Home’s fiscal third-quarter margins are likely to have remained under pressure from pricing pressure, higher relative land costs and lower operating leverage. Material cost pressures, particularly from lumber, are also likely to have weighed on profitability. However, the higher mix of built-to-order deliveries and better operating leverage are expected to have provided some support to margins during the quarter.
KB Home expects adjusted housing gross margin in the range of 16-16.6%, significantly down from 18.9% reported in the year-ago quarter. Our model projects adjusted housing gross margin and homebuilding adjusted operating margin to be 16.3% and 4.9%, respectively, indicating year-over-year declines of 260 basis points (bps) and 390 bps.
KBH expects selling, general & administrative expenses, as a percentage of housing revenues, to be between 11.3% and 11.9%, compared with 10.7% in the year-ago quarter. The company expects the SG&A ratio to improve sequentially in the second half of the year, mainly due to increased volume and higher revenues. Our model expects the metric to increase 130 bps year over year to 11.3% in the fiscal third quarter, while declining 140 bps sequentially.
Orders & Backlog
Order activity in the fiscal third quarter is likely to have reflected cautious buyer behavior amid affordability pressures and mortgage rate uncertainty. Still, KB Home reported a steady order pace entering the quarter, while the built-to-order mix has been rising as a percentage of orders. The company also expected backlog to grow sequentially and return to year-over-year growth in the fiscal third quarter.
Keeping these factors in mind, we expect new orders to decrease 3.6% to 2,843 units on a year-over-year basis. However, the backlog is expected to be 4,633 units, implying 6.9% growth from 4,333 units reported in the prior year.
What Our Model Indicates for KBH
Our proven model does not predict an earnings beat for KB Home this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case this time around.
KBH’s Earnings ESP: The company has an Earnings ESP of -5.32%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
KBH’s Zacks Rank: The stock currently has a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
Comfort Systems USA, Inc. (FIX - Free Report) currently has an Earnings ESP of +4.37% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s earnings beat estimates in each of the last four quarters, the average surprise being 34.6%. Comfort Systems’ earnings for the third quarter of 2026 are expected to grow 50.6%.
Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +10.45% and a Zacks Rank of 3 at present.
The company's earnings beat estimates in three of the last four quarters and missed on the remaining occasion, with the average surprise being 11.4%. Primoris’ earnings for the third quarter of 2026 are expected to decline 61.7%.
Quanta Services, Inc. (PWR - Free Report) currently has an Earnings ESP of +3.45% and a Zacks Rank of 1.
The company’s earnings have topped in each of the trailing four quarters, the average surprise being 17%. Quanta’s earnings for the third quarter of 2026 are expected to grow 47.2%.